As Indianapolis resident Joey Myles was building his “forever home” on the south side, there was one feature he wanted: solar roof panels.

He hired a solar panel contractor, drew up the plans and invested the money. All that was left was getting approval from his homeowners association’s architectural review committee, a step he thought would be no more than a formality.

“It was 2014, who would be against solar panels?” Myles said of this thought process at the time.

But the HOA was against the panels, or at least the look of them. Myles had to submit three sets of blueprints before the architectural review committee approved a panel placement arrangement it felt would complement the look of the neighborhood. The five-person committee had nothing against solar energy, Myles said — it was simply a matter of getting the aesthetics right.

Freeman

Myles was finally able to install 33 solar panels on his roof in 2016, but the difficult journey he took to get there left him smarting. He took the matter to Sen. Aaron Freeman, who was then a candidate, and the now-Republican senator agreed to take up the cause. Since taking office, Freeman has filed two bills to restrict homeowners associations’ ability to prohibit solar panels, including Senate Bill 207 filed this year.

But like Myles, Freeman is seeing what a tough sell solar panels can be where HOAs are concerned.

SB 207 would not allow for a total ban on solar panels in any HOA covenants drafted or amended after June 30. Associations may require preapproval of solar panels, but can only require a resident to take their panels down in extreme circumstances, such as when a court determines the panels would threaten public safety or violate a law.

“The words ‘always’ and ‘never’ are not in my vocabulary — you should look at each individual situation and make a good decision,” Freeman said. “When somebody says ‘absolutely no’ (solar panels), that’s just not right.”

Like a similar bill Freeman filed last year, SB 207 failed to garner support in the House of Representatives after passing the Senate. Despite that, both Myles and lawmakers say they plan to continue fighting for what they consider an important environmental issue.

“This is not an effort to curtail homeowners associations,” Myles said. “It’s just the rules on solar panels.”

Old-school rules

Chandler

Many homeowners associations drafted their covenants — including solar panel restrictions — in the 1980s or 1990s at a time when the panels were much bigger and bulkier than they are today, said Greg Chandler, a partner at HOA law firm Eads Murray & Pugh, P.C. Similarly, Laura Arnold, president of the Indiana Distributed Energy Alliance, Inc., has researched neighborhood covenants and found that some solar panel restrictions date all the way to the 1970s, when solar panel manufacturers built models that are no longer even on the market.

But amending neighborhood covenants is a tall order, Arnold said. In some neighborhoods it takes a simple majority, while other associations require approval from 75 percent of residents. Given that high bar, Chandler said HOAs may be powerless to do anything about solar panel restrictions, even if the restrictions no longer make sense given today’s solar technology.

Freeman likened the situation to satellite dishes, which many HOAs banned in the late 20th and early 21st centuries. The federal government eventually stepped in to end the total ban on satellite dishes but allowed associations to fashion rules regarding their appearance and placement.

SB 207 is a state effort to enact similar legislation regarding solar panels, Freeman said.

“I don’t see it as any different,” Freeman said. “… It makes a lot of sense for the environment and for homeowners while still giving homeowners associations a say over what’s installed and how they’re installed.”

Level playing field

Buschmann

From a legal perspective, attorneys who represent HOAs say their clients have few concerns about SB 207. Stephen Buschmann, an Indianapolis HOA attorney who sits on the legislative action committee for the Indiana chapter of the Community Associations Institute, said the July 1 effective date of the bill lessened concerns about the implications of the legislation.

The bill Freeman introduced last year would have been retroactive, a provision he acknowledged was a major sticking point for HOAs. But SB 207 removed the retroactive language, so now existing neighborhood covenants would be unaffected by the legislation, Buschmann said.

Of those existing covenants, very few include total solar panel prohibitions, Buschmann said, and in the 30-plus years he’s been practicing, no one has ever asked him to draft a total prohibition into neighborhood rules. Most covenants require prior approval from an architectural committee — much like the process Myles faced — and that requirement would not have been affected by SB 207, he said.

The bill also exempted townhomes and condos, another provision the Thrasher Buschmann & Voelkel, P.C. president said has provided reassurance to entities with concerns about the solar panel legislation. That exemption carves out an exception for communities where individual residents don’t own their roofs, but rather pay joint maintenance fees with other residents to cover the cost of the property’s upkeep.

“This bill only says, ‘If you don’t have it (a prohibition), you can’t come in and do it,’ and nobody’s asking to do it,” Buschmann said. “And it excepts the ones the association is responsible for maintaining.”

Legislative hurdles

Despite a lack of concern from HOAs, Freeman’s solar panel bills struggled to gain traction in both 2017 and 2018.

Both of his bills made it through the Senate — including a 36-12 vote for SB 207 in early February — but failed to get hearings in the House. Freeman speculated that this year, the issue may be the contractual nature of HOA covenants. If a person doesn’t like the rules of a neighborhood, then the natural assumption is that they don’t have to live there, Freeman said.

But the rules those associations enforce should be reasonable given the prevalence of HOAs, he said, especially when it comes to alternative energy options.

Chandler also pointed to lingering confusion about the implications of SB 207 on existing covenants that are amended after June 30.

When asked about the amendment provision in the Senate, Freeman said he was unsure whether an amendment after that date would subject an HOA to SB 207. Chandler similarly said he was unsure about the exact meaning of the amendment language but surmised that HOAs that amend covenants after the effective date would find themselves subject to the legislation, even if the amendment was unrelated to solar panels.

Next steps

Those concerns have kept SB 207 and its 2017 counterpart from getting a House committee hearing, so its proponents tried to amend the language of SB 207 into another 2018 property rights bill, Senate Bill 197. However, the proposed amendment was deemed not germane to SB 197 and, thus, was not brought before the House Judiciary Committee for consideration, Myles said.

The plan then shifted to finding a home for SB 207 in a conference committee bill, but on March 2, Rep. Woody Burton informed Myles the legislation was once again dead. The Whiteland Republican, who sponsored SB 207 in the House, has already agreed to carry similar legislation next year, and Myles said he is prepared to continue the fight for his legislation.•

New poll shows Indiana conservatives support clean and renewable energy as part of state’s energy mix

FOR IMMEDIATE RELEASE

DATE: March 6, 2018

CONTACT: Hannah Carlock (317-536-6900) hannah@afhathaway.com

Indianapolis, Ind. – Indiana conservatives are launching a new organization that will focus on advocating for an “all of the above” energy policy that includes support for clean and renewable energy like wind and solar. The Indiana Conservative Alliance for Energy (ICAE) is comprised of conservative leaders across the state who are prepared to help Indiana lead on new and clean energy development to reach a next level economy, create jobs, and improve the quality of life for all Hoosiers.

“As Indiana works toward creating a next level economy, increasing the use of renewable energy is a strong signal that Indiana wants to take the lead in technology development,” said Tim Phelps, executive director of ICAE. “Developing homegrown, clean, efficient, and affordable energy will help Indiana pave the way for our nation’s energy future, making the state a more attractive place to locate business and secure talent. Expanding the use of renewable energy will also allow us to have clean, healthier air and less pollution in our state and communities, something which almost all Hoosiers support.”

The ICAE will focus on conservative solutions to statewide energy policy that increasingly emphasize clean, efficient, reliable, and affordable energy sources. Working with conservative leaders across the state, ICAE seeks to convince Hoosiers that clean energy doesn’t have to mean central planning and government subsidies.

“Conservation is a conservative idea – and as good citizens it is our responsibility to leave the earth better than we found it for future generations,” added Phelps. “The cost of renewable energy is decreasing significantly every year and is now more inexpensive than traditional energy choices – without government subsidies that pick winners and losers.”

To coincide with its launch, ICAE released the results of a poll of Indiana conservatives that showed that nearly six-in-ten conservatives were more likely to support a candidate that favored increasing the use of renewable energy and over 85 percent believe the state should pursue an “all of the above” policy that includes renewable sources like wind and solar.

Phelps concluded: “It is a common misconception perpetuated by the media and progressives that conservatives oppose clean energy. Our poll shows that when it comes to clean and renewable sources, Indiana conservatives are already there. ICAE now seeks to facilitate a dialogue about the policy solutions that can move us further in the direction of a next level clean energy economy.”

About ICAE: The Indiana Conservative Alliance for Energy is a broad coalition of Indiana conservatives committed to helping Indiana become a leader in clean energy by supporting an “all of the above” strategy that includes an emphasis on clean energy technologies like efficiency and renewables such as wind and solar. Learn more by visiting www.IndianaConservativeAllianceforEnergy.com.

IndianaDG has posted information about these groups in other states. Here is a sample of these articles.

In this op-ed, Solar Reviews’ Andrew Sendy takes apart the cost-shift argument that utilities make when trying to get regulators to dismantle net metering, and looks at why they would push this myth on the public.

If a state’s has net-metering programs that compensate its customers for the excess electricity their solar array produces and exports back to the grid—and there’s a good chance they do, given that 43 states and the District of Columbia currently have them—you will often hear utilities make an argument when they decide they want to dismantle them.

Specifically, they try to label the customer, as a solar consumer, a mooch that lives off their fellow hard-working ratepayers. Their argument goes something like this:

Solar consumers produce their own solar power on-site, meaning that they are not using their distribution and transmission systems (aka “the grid”). Therefore, the argument goes, they are not paying their fair share of upkeep of the grid. And since they aren’t paying for it, someone else obviously has to—and so they claim those costs shift to non-solar customers.

[To see if a state has net metering, check out SolarReview’s guide by clicking here.]

But is that really true? That’s what this article will explore.

Is It A Really Complicated Question?

Turns out, it really isn’t. Sixteen state-level studies, according to the Solar Energy Industries Association, have disproven the cost-shift argument. And the definitive national study, done by the well-respected solar research laboratory, the Lawrence Berkeley National Lab, has found an even more specific repudiation of the utilities’ argument.

Berkeley found that most states—all but three, in fact—have a negligible solar power cost shift at all. Why? Because most states have solar penetration levels far below 10%. Until you hit that level of penetration (i.e., the total amount of solar electricity capacity installed), there’s no cost shift at all.

Perhaps even more surprisingly, even at penetration levels of 10% or higher, the “shift” is only 5/1,000 of a cent per kilowatt-hour. Ultimately, even at high rates of solar penetration, the effects on the bills of non-solar consumers are infinitesimal.

Furthermore, the argument doesn’t take into account the benefits of having more solar on the grid brings, including peak-shaving (the easing of grid strain during periods of high electricity use), utilities’ avoided costs (the more solar on the grid, the fewer expensive traditional power plants they have to build) and, naturally, the environmental benefits.

One study in Maine, in fact, showed that solar consumers would actually save other ratepayers $750 million over 20 years.

Clearly, solar consumers aren’t a problem. So what on Earth is really going on?

So Why Do Utilities Make This Argument?

Herein lies the crucial question: If the “cost-shift” argument is so blatantly false, why do utilities keep making it? And how can solar consumers fight it?

As been discussed elsewhere, it’s one of the oddest industry relationships we’ve ever encountered. After all, solar does need utility support from time to time, and utility customers want solar. At the same time, however, that symbiotic relationship is constantly being challenged by the competing economic models. The more customer-sited solar there is, the fewer customers are feeding the utilities’ coffers and keeping their investors’ dividends high.

Given this (friendly?) competition/rivalry, it’s no wonder the utilities still make the argument, is it? It’s a way to split solar users from non-solar users in a way that allows them to keep their monopoly, centralized electricity distribution model in place (the old divide and conquer model used with such success in the old British Empire).

And with the overall number of solar consumers still relatively small in most utilities’ customer base, it’s hard to debunk this myth that comes back from the dead as often as Chucky the Killer Doll. In fact, not even most solar consumers know this argument is a myth.

But, armed with knowledge (and a handy link to the Berkeley study), customers can make sure their utility is never again able to use this argument to dismantle the most-effective incentive to encourage solar adoption.

And consumers can stop feeling guilty. They are not only not mooching off their neighbors, but they’re improving the grid and its reliability for everyone.

The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.

Each year, the Institute for Local Self-Reliance provides a score for each state’s energy policies based on how they help or hinder local clean energy action. In 2018, 21 states had a failing grade, 17 were mediocre, 11 had a passing grade, and just 2 excelled at enabling residents to act individually and collectively to take charge of their energy future.

Explanations of each policy are linked the first time they appear. The scoring methodology is on our Community Power Map site.

Indiana has a Community Power score of 5 out of 36. The state offers net metering and above average interconnection policies, but little else. It doesn’t have a renewable standard requiring utility renewable energy procurement to include distributed resources and it lacks policies allowing communities to provide financing with property assessed clean energy, to pick their energy suppliers, or encourage shared/community renewables. The state also lacks local flexibility in setting building energy codes or a standard purchase contract for renewables.

In recent media coverage of House Bill 227, we have been told that, from a utility perspective, proposed legislation before the Kentucky General Assembly does not end net-metering as we know it.

“Alternative facts” are not useful in setting public policy and tend to foster division, particularly when this is not a partisan issue.

Under current law, private solar generators receive a credit at the retail rate for any excess solar power they generate and send to the electric grid — a credit that under current legislation can never be cashed in but only used at a later date by the system owner.

Under HB 227, that rate changes to only a few cents per kilowatt-hour (kWh). The difference? Roughly a 70 percent decrease in credit for most ratepayers that will most certainly end net metering in Kentucky.

Advocates of HB 227 say this change is justified because a few cents per kWh is the current “market rate.” Calling a few cents per kWh the market rate is disingenuous. We only need to look at Duke Energy for an excellent example.

Duke has just invested approximately $14 million in seven megawatts of solar in Northern Kentucky — more than three times the amount of privately owned, net-metered solar energy generation in its service territory.

Duke will receive a 30 percent federal tax credit and accelerated depreciation for the purchase and installation of this array. A utility tax credit worth millions of dollars for these large projects are described by HB 227 supporters as “subsidies” or “handouts” when private citizens receive them.

Duke’s submission to the Kentucky Public Service Commission suggests the array will produce around 13 million kWh per year. A typical solar array has a 25-year warranted life. Duke appears to be paying double the market rate for solar production generated at its new utility-scale solar array.

Under HB 227, utilities are asking for regulators to allow them to pay their private customers just over three cents per kWh for their solar production while at the same time building a solar array that will require all Duke customers pay far more per kWh for solar generation.

It seems pretty clear who (customers) will be subsidizing whom (Duke) under HB 227.

HB 227 is not simply an anti-solar bill. It is an anti-free market bill that is designed to ensure that private generators of solar energy become subsidiaries of their monopoly utility. Utilities may keep caps in place on the amount of solar a customer generator can install as well as the percentage of solar that will be allowed on the grid.

If fairness is the goal, caps are not necessary.

The bill continues to block efforts to offer leasing and power purchase agreements to solar customers, including those who are younger or don’t have the up-front money to invest in their own power production.

These changes to financing practices would also allow solar installers to compete via a business model similar to that of utilities by allowing system financing over long durations, a model common in other states.

The success of the solar industry in driving solar costs lower over the past decade has been largely due to free-market principles. We are willing to embrace fair credits for production that recognize both the benefits of solar to utilities and the rightful costs they need to recover.

We also are willing to embrace utility rate-making reforms to make actual costs and values more transparent. We are not willing, however, to let monopolistic utilities swindle Kentucky consumers and effectively destroy private solar production in our state.

The state’s utility monopolies remain entrenched in their position and unwilling to compromise to produce a fair, free and competitive future energy market for all Kentuckians.

About IndianaDG

The Indiana Distributed Energy Alliance was incorporated with the Indiana Secretary of State on 3/15/2012 as a non-profit corporation. The Alliance intends to incorporate as a 501(c)(3) organization with the IRS. This reorganization is intended to allow for a broader coalition effort amongst businesses, individuals, elected officials, local units of government, colleges and universities, labor unions, economic development groups as well as environmental and consumer organizations to join together to promote renewable energy and distributed generation.